A rotary tool, such as an impact wrench, generally includes a housing supporting a motor, an output shaft having a first end adapted to engage a fastener and a second end having an anvil, and a drive mechanism operable to drive the output shaft. In impact wrenches, the drive mechanism generally includes one or more tilting hammers or dogs, which are rotated about a central axis by the motor and periodically impact the anvil to hammer or drive the output shaft in either a forward or a reverse direction. An operator generally toggles a switch located on the housing to change the rotation direction of the output shaft between the forward and reverse directions. Generally, the operator operates the tool in the forward direction to thread the fastener into engagement with a workpiece, and in a reverse direction to unthread the fastener from the workpiece.